Areva chairman quits and adds to troubles at nuclear group

Areva, which part-controls Sellafield and wants to be at the forefront of Britain's atomic renaissance, is set to lose its chairman within the next seven days in what would be the latest of a series of blows to befall the French nuclear engineering group.

Frédéric Lemoine, non-executive chairman and a close adviser to the former French president Jacques Chirac, has been appointed chief executive of Wendel Investments, a family-controlled private equity house.

Lemoine, who is known to have crossed swords with Anne Lauvergeon, Areva's chief executive, is expected to step down at the nuclear group by Friday, leaving it scrabbling round to find a replacement.

The shake-up at the top could not come at a worse time for Areva, which is already nursing €3.5bn (£3.2bn) of net debt and needs a further €14bn to meet ambitious expansion plans at a time when it is parting company with one of its major investors, Siemens of Germany.

Areva is also fighting to stem a public relations disaster at Olkiluoto, in Finland, where the first nuclear plant under construction in Europe for nearly 30 years is running three years behind schedule.

The group's operating income plunged 45% to €417m in the 12 months to 31 December but that was without taking into account the €750m write-off from the Finnish reactor delays and cost overruns.

Presenting the accounts at the end of February, Lauvergeon admitted that the global financial crisis was "a test of the robustness of the Areva business model". The company was unavailable for comment last night but industry specialists said the chief executive's comments were a "huge understatement" given the problems facing it.

Areva is keen to project a positive image as it presses the UK authorities to agree to adopt its EPR design, used at Olkiluoto, in Britain. The company, which is already a part-manager of the Sellafield atomic site in Cumbria, works in close co-operation with the French power group EDF, which has just taken over British Energy, the UK atomic power provider.

EDF is hoping to use Areva-designed reactors for a new generation of plants in the UK. The first is earmarked for Hinkley Point in Somerset and could be in operation by 2017, just as the country faces an energy crunch.

The planned exit of Siemens, which controls 34% of the subsidiary Areva NP, has severely strained relations between the two. Areva has threatened to sue the Germans over their decision to set up a rival venture with Rosatom of Russia. It is said to need €14bn of new money to fund investment over the next four years.